AARP, 192
activist investors, 155, 158–159
adaptation, 82–83, 84, 103–106, 129–130, 142–143
AdSense, 154
Advanced Micro Devices, 129
Affordable Care Act, 92
agricultural workers, 192
Ahir, Hites, 82
Alphabet, 134
American Dream, 2
American International Group (AIG), 137
Anheuser-Busch InBev (ABI), 123–124
antitrust legislation, 53–56, 152, 153
Apple iOS, 131
Aristotle, 183
Aspen Publishers, 77
Atlanta testing scandal, 45–46, 53
Australia, 206
auto exports, 151
Avishai, Ellie, 171
Bain & Company, 175
balanced scorecard, 129
Bank Holding Company Act, 108
Belgium, 157
See also Gaussian distribution
Bieber, Justin, 65
Black Monday, 52
Blue Chip Economic Indicators forecast, 77–78, 82
Boston Consulting Group, 175
Box, George, 25
Bridgewater Associates, 31
Bristol University, 184
budgets, 124, 126, 173, 199–200
Buffett, Warren, 157
Bush, George W., 30
business
business executives, 113
business schools, 32, 174–176, 180
butterfly effect, 81
buying groups, 192
Canada
antitrust policies in, 55
financial system of, 138–142, 151
metaphor for, 26
voter registration in, 205–206
See also democratic capitalism
survival of, 210
capital markets, 50, 55, 85, 86, 99, 109–110, 112, 129, 155
capital-markets policy, 55
Cargill, 133
certainty, teaching, 170–173, 181, 185
chaos theory, 81
Chavez, Cesar, 192
Chicago Board of Trade, 64, 90
chief executive officers (CEOs), 64, 86–88, 121, 155
See also business executives
Churchill, Winston, 26
circuit-breaker system, 108
citizens, 114
collective action by, 192–197, 207
model of, 145
passive, 198
purchasing power of, 188–192, 207
reciprocal political relationships and, 197–200
Clayton Antitrust Act, 53
Clinton, Bill, 54
cloud computing, 131
collapsing sand pile example, 61–62
collective action, 192–197, 207
commercial banks, 108
communism, 15
comparative advantage, 40–41, 56
compensation theory, 146
competition, 63–65, 131–135, 151
Competitive Advantage of Nations, The (Porter), 17, 67
complex adaptive systems, 80, 176–178, 182, 211–212
See also natural systems
complexity
Congressional Budget Office (CBO), 31, 78, 79
Consensus Forecasts, 82
consolidation
See also mergers
consumer protection, 54
continuous adaptation, 82–83, 105–106
Contract with America, 198, 199
Costco, 125
Cowan, George, 177
creativity-intensive jobs, 68–70
Criterion-Referenced Competency Tests (CRCT), 45–46
customer experience, 117, 122–123
customer value, 130
Dalio, Ray, 31
data
interpretation of, 172, 178–179
Data Resources Inc. (DRI), 22–23
debate, 214
Declaration of Independence, 40
Deming, W. Edwards, 43, 56, 123
Deming Prize, 43
Democracy in America (Tocqueville), 198–199
democratic capitalism
business executives and, 115–135
economic growth and, 5
initiatives to improve, 211–212
as natural system, 94
political leaders and, 137–164
resilience of, 15
See also political parties; politicians
derivatives, 55
design thinking, 180
directly observable data, 178–181
dividends, 98
Dodd-Frank Act, 142
dot-com boom, 66
dot-com crash, 80
Dow Jones Industrial Average, 132, 138
earnings expectations, 87–88, 155
Eastern philosophy, 183
e-commerce, 66
economic bubbles, 103
economic depressions, 31
economic forecasting, 77–78, 82, 100–101
economic growth, 5, 6, 8, 12–13
Pareto distribution and, 75–76
productivity growth and, 9
See also models
machine model, 22, 25, 26, 30–44, 94, 100, 103–104, 123, 210
overconfidence in, 25
economic outcomes
efficiency as driver of, 39–43
proxies and, 57
economic policy, 22, 41, 53–56, 80, 138–139
Economic Recovery Tax Act, 160
economics, neoclassical Keynesian, 23–24, 25
economic stagnation, 5–9, 12, 76
economic system, imbalances in, 1–3
economies of scale, 53
education policy, 29–30, 45–49
educators, 114
See also teaching
appreciation of qualities and, 181–184
directly observable data and, 178–181
role of, 169
teaching certainty and, 170–173, 185
efficiency
balance between resilience and, 15, 99–114, 210
in capital markets, 55
goal of, 14
product costs, 54
scientific management and, 42
short-term, 155
efficiency defense, 53–55, 63, 153–155
Efficiency Movement, 42
employees
customer experience and, 122–123
training of, 125
Enron, 85
Environmental Protection Agency, 192, 207
European Union, 54–55, 129, 151, 153–155
Every Student Succeeds Act, 49
executive compensation, 64, 87–88
executives. See business executives
executive tenure, 155
expectations management, 87–88
experimentation, 119
Facebook, 54, 129, 134, 153, 191, 192
Fair Districts, Fair Elections, 204
Fair Districts Florida, 204
fascism, 15
federal budget, 91
Federal Reserve Board, 31, 80, 103, 137
Fernandez, Brian, 188
Financial Industry Regulatory Authority (FINRA) Rule 2711, 112–113
Financial Industry Regulatory Authority (FINRA) Rule 5310, 64
financial institutions, 137–142
financial regulation, 107–108, 112, 139–141, 143
Florange Act (France), 157
foreign banks, 151
foreign competition, 63
forward-looking statements, 87
Four Seasons Hotels and Resorts, 122–123
free markets, 40
free trade, 41–42, 56, 63, 66, 150–152
Freidin, Ellen, 204
friction, 101–103, 113, 123–125, 142, 149–152
Friedman, Milton, 24
Fukushima nuclear facility, 100
Fung, Josie, 171
gaming the system, 84–94, 104, 143
Gates, Bill, 129
Gaussian distribution, 33–38, 44, 57, 59, 62–63, 76, 100, 106
GDP per capita growth, 8
General Agreement on Tariffs and Trade (GATT), 41–42, 63, 150
General Electric (GE), 87
Gerry, Elbridge, 201
Gibson, William, 16
Glass-Steagall Act, 107–108, 109
global financial crisis, 55, 77, 78, 80, 81, 85, 108–110, 137–138
golden mean, 183
Gomez, Selena, 65
Good Jobs Institute, 126
Good Jobs Strategy, The (Ton), 124–125
Google Android, 131
government digital services (GDS), 147–149, 163
See also public policy
Graham, John, 155
Great Depression, 4–7, 12, 15, 31, 41, 76, 159
Groh, Kevin, 188
Grosso, Beth, 165–169, 171, 172, 181
growth. See economic growth
Hamilton, Alexander, 40
Harris, Michael, 47
Harvard Business School, 175
Harvard Kennedy School, 180
Harvey, Campbell, 155
Hasso Plattner Institute of Design, 179–180
hedge funds, 91, 155, 157, 158
high-frequency trading, 90, 156–157
high-speed trading, 90
hotel industry, 122
House of Representatives, 201, 202
IBM, 132
IDEO, 179
IIT Institute of Design, 180
Illinois Institute of Technology, 180
improvement, 103–106, 113, 132
income
average, by percentile, 1913–2015, 7
disparities, 66
growth, 33
income distribution, 14, 36–37, 38, 63, 70, 161
incumbents, 202
Industrial Revolution, 41
See also mergers
innovation, 54
input-output relationships, 81–82
input-output tables, 22
Instagram, 61, 65, 71, 129, 191, 192
Institute for Competitiveness & Prosperity, 17
integrative thinking, 174, 176, 178
Intel, 129
internet of things (IoT), 106
Investors Exchange (IEX), 156–157
Irish potato famine, 75
isolation, 199
Italy, 157
I-Think Initiative, 171–172, 181
Japanese auto manufacturers, 43, 151
Jefferson, Thomas, 40
Jenner, Kylie, 65
Joe’s Stone Crab, 115–120, 121, 132–133
Johnson, Dwayne, 65
Kaplan, Robert, 129
Kardashian, Kim, 65
Ka-shing, Li, 52
Katsuyama, Brad, 156
Kelley, David, 179
Kennedy, John F., 198
King, Martin Luther, Jr., 192
labor
labor costs, 49–50, 63, 122, 124–125, 128
ladder of inference, 167
Leamington Ketchup Affair, 187–190
LearningEdge platform, 177
legislation, 93
Lehman Brothers, 84–86, 104, 137
Leontief, Wassily, 21–22, 30, 80
leveraged buyouts (LBOs), 97–99, 101
Loblaws, 188
Long Depression, 31
long-term capital, 157, 158–159
Long-Term Stock Exchange (LTSE), 156
Lorenz, Edward, 81
Loungani, Prakash, 82
Loyalty Effect, The (Reichheld), 27–28
Lucas, Robert, 24
MacArthur, Douglas, 43
machine model, 22, 25, 26, 30–44, 94, 100, 103–104, 123, 210
Madison, James, 40
management
scientific, 42
total quality, 43
manufacturing industries, 41, 126
Martin, Paul, 141
Martin Prosperity Institute, 2, 17
Massachusetts Institute of Technology (MIT), 176–177, 184
master’s in business administration (MBA), 174–175
McKelvey, Bill, 62
Measure What Matters (Doerr), 52
median family income, 4–5, 11, 38
median voter, 38
mergers, 53–54, 63–64, 123–124, 141
metaphors
for education, 29
machine, 22, 25, 26, 30–44, 94, 100, 103–104, 123, 210
Microsoft, 131
mobile operating systems, 131
models
in business and public policy, 27–30
of citizens, 145
core components of, 29
critical evaluation of, 171
doubling-down on existing, 214
economic. See economic models
Moms Demand Action for Gun Sense in America, 197
monetarists, 24
monopolies, 53–54, 63, 129–135, 152–154
mortgage-backed bond market, 109–111
Mothers Against Drunk Driving (MADD), 193–196, 199
multihoming, 192
NAFTA. See North American Free Trade Agreement
NASCAR, 102
National Football League (NFL), 144–145
National Rifle Association (NRA), 197
natural systems
continuous adaptation in, 82–83
dynamic interactions in, 80–81
relationship between inputs and outputs in, 81–82
stability of, 84
NCLB. See No Child Left Behind Act
neoclassical Keynesian economics, 23–24, 25
Nestlé, 192
Net Promoter Score (NPS), 28, 29, 48
new-economy companies, 71
New England Complex Systems Institute, 177
New York Stock Exchange (NYSE), 64, 88–91, 92, 93
Nicomachean Ethics (Aristotle), 183
No Child Left Behind Act (NCLB), 29–30, 45, 49
nonreductionist thinking, 118–119
North American Free Trade Agreement (NAFTA), 66, 150
Norton, David, 129
NYSE. See New York Stock Exchange
Obamacare, 92
Office of the Superintendent of Financial Institutions (OFSI), 139–141
off-shoring, 155
oligopolies, 63
optimal financial structure, 173
options trading, 55
outsourcing, 155
Pareto, Vilfredo, 59
Pareto distribution, 46, 57, 59–76, 100
Parker, Jeffrey, 86
Parkland shooting, 197
participatory budgeting, 199–200
Penner, Elliot, 188
performance management, 173
Pershing Square, 158
Persona Project, 2, 4, 14–16, 206
Phillips curve, 24
pitch-count restrictions, 102
platform businesses, 71
policy making
long-term thinking and, 155–159
political economy, 38
political parties, 92, 201–205
political relationships, 197–200
politics, disengagement from, 3, 198
Power Law distribution. See Pareto distribution
preferential attachment, 61
Principles of Scientific Management, The (Taylor), 42
private markets, 91
Private Securities Litigation Reform Act, 87, 112
Private Sponsorship of Refugees Program, 196
production-cost efficiencies, 54
productive friction, 102, 113, 142, 149–152
Progressive Era, 53
progressive taxation, 14, 159–162
protectionism, 151
proxies
for measuring progress, 46
multiple measurements as, 127–129, 135
outcomes and, 57
public companies, 91
public policy
schools of, 180
public utilities, 152
purchasing power, 188–192, 207
Putnam, Robert, 199
Qualcomm, 154
qualities, appreciation of, 181–184
QuikTrip, 125
Rajgopal, Shiva, 155
random-access memory (RAM), 177
real world, interaction with, 178–181
reciprocal political relationships, 197–200
Reckitt Benckiser Group, 188
reductionism, 119–123, 134, 173–178
refugees, 196
regulations, financial, 107–108, 112, 139–141, 143
Reichheld, Fred, 27, 48, 147–148
Renaissance Technologies, 157
Report on the Subject of Manufactures (Hamilton), 40
representative government, 201
See also political parties; politicians
balance between efficiency and, 15, 99–114, 210
monopolies and, 132
Riel, Jennifer, 171
Ries, Eric, 156
Rise of the Creative Class, The (Florida), 67–68
robber barons, 53
Rockefeller, John D., 129
Rodrik, Dani, 150
Roosevelt, Franklin, 12
Rotman School of Management, 176, 180, 212–213
safe harbor provision, 87
Sandy Hook shooting, 197
Santa Fe Institute, 177
Sarbanes-Oxley Act (SOX), 84–85, 142
school shootings, 197
scientific management, 42
SeaWorld Entertainment, 192
Securities and Exchange Commission (SEC), 64, 90, 112–113, 156
September 11, 2001, 111
Sherman Antitrust Act, 53, 152
short-term capital, 157
short-term efficiency, 155
slack, 50, 56, 63, 123–127, 132, 134–135
Sloan School of Management, 177
smartphones, 131
Smoot-Hawley Tariff Act, 41
South Korea, 151
SOX. See Sarbanes-Oxley Act
Spread Networks, 90
stability, 84
standard deviation, 35
standardized tests, 29–30, 45–46, 48–49, 170
Stanford-Binet IQ test, 33
Sterman, John, 25, 30, 111, 145, 177
stock exchanges, 55–56, 64, 88–93
circuit-breaker system of, 108
Stottlemyre, Mel, 101
Stottlemyre, Mel, Jr., 101–102
supply costs, 50
surrogation, 47, 50–53, 57, 127–129
survival of the fittest, 129–130
sustainability problem, for monopolies, 130–132
swing voters, 5
Syrian refugee crisis, 196
System Dynamics Group, 177
Taoism, 183
taxes
Tax Reform Act (1986), 160
Tayler, Bill, 47
Taylor, Frederick Winslow, 42, 56–57
teachers. See educators
teaching
See also educators
integrative approach to, 174
tenure-based voting rights, 157–159
Third Congressional District of Maryland, 202, 203
third-party candidates, 201–202
tightly coupled systems, 106–107
time-and-motion studies, 42
Tobin, James, 92
Tocqueville, Alexis de, 198–199
total quality management, 43
Toyota Production System, 43
trade
free, 41–42, 56, 63, 66, 150–152
productive friction in, 150–152
trade barriers, 150
Trader Joe’s, 125
trade wars, 41
training, 125
transaction costs, 106
trickle-down economics, 161
Troubled Asset Relief Program (TARP), 138, 144
Uber, 192
unemployment, 24
United States, metaphor for, 26
University of Chicago, 24
US Census Bureau, 4
US Constitution, 40
US economy
efficiency in, 63
as efficient machine, 21–44, 94, 100, 210
sectors, 22
user-experience (UX) design, 180
value creation, 130
voter registration, 205–206, 207
Voters Not Politicians, 204
Wagner School, 180
Wallace, George, 201
Wallenstein Feed & Supply (WFS), 133–134
Washington Mutual, 137
Waste Management Inc. (WMI), 71–73
waste-management industry, 71–73
wealth disparities, 7–8, 12–13, 66, 161–162
Wealth of Nations, The (Smith), 39, 40
wealthy, during Great Depression, 7
Welch, Jack, 87
Wells Fargo & Company, 47–48, 101, 127, 128
workers
agricultural, 192
wages of, 9
workforce reduction, 155
WorldCom, 85
World Trade Organization, 63
World War I, 159
yang, 183
yin, 183
zero-based budgeting (ZBB), 124, 126, 173
Zuckerberg, Mark, 129